As a part of our ongoing series on basic estate planning questions, today we are going to look at what happens to your estate if you do not create a plan. If you have been reading along in our series, you know that everyone will leave behind an estate. What happens to that estate after your death, or in the event you become incapacitated, is what estate planning is all about.
The reality behind estate planning, however, is that at least half, and probably more, of Americans never gets around to creating a plan. What happens to all those estates? How does the law handle those?
Let’s take a closer look at what happens when you don’t leave behind an estate plan.
Who will inherit my property?
One of the most important parts of creating an estate plan is making choices about inheritances. Do you want to leave all of your property to your children? Do you want to leave money to charity? Do you want to create a trust for your grandchildren?
Even if you know how you want inheritances distributed, you have no control over who receives property from your estate if you don’t have an estate plan. If you die without a plan, you are said to have died intestate. In situations where someone leaves an intestate estate, California’s intestate succession laws determine who inherits. Your closest surviving relatives, be that your spouse, your children, your parents, or others, will inherit your property if you die intestate. If you die intestate and don’t leave behind any surviving relatives, the state of California will inherit your estate.
Further, state intestate inheritance rules apply even if you told people your inheritance choices. Unless you make those choices known in a legally recognized manner such as a valid Will or Trust, the default inheritance laws will still apply.
Who will make decisions for me if I become incapacitated?
You leave an estate not only after you die, but also after you become incapacitated. But if you’re incapacitated and cannot manage your estate, who will manage it for you? The answer to this question, like the question of inheritances, depends upon the law.
When a person becomes incapacitated in California, someone else has to make decisions for that person. Depending on the circumstances, that person, called a conservator, could be the incapacitated person’s spouse, sibling, parent, or someone else appointed by a California court. The key thing to remember here is that, if you don’t have an estate plan, you don’t get to choose who your representative(s) will be. It will be made by a stranger in a black robe.